Cross-border carve-outs: why one third fail and how to get them right

Carve-outs have become increasingly popular among global dealmakers – with volume tripling since 2016. Post Covid-19, pent-up demand, distressed and non-core assets and lower valuations are drawing cash-rich private equity firms and corporates back to the deal table.

A TMF Group study reveals that many cross-border carve-outs suffer costly delays due to three often overlooked fundamentals. Nearly 1 in 5 corporates and 1 in 4 PE firms report deals taking longer than expected – with delays adding up to 16% in extra costs for overruns beyond four months.

The report identifies three keys to cross-border carve-out success:

• Local presence: 76% success rate with a strong local footprint
• Realistic timelines: 84% of deals completed within four months succeed
• Robust preparation: 78% of corporates and 64% of PE firms say delays were avoidable with better preparation